Following the lead of the state Legislature, the Johnson City Schools Board of Education trimmed new raises for its employees out of the budget proposal that will go before the City Commission.

The unanimous decision Monday night to trim the salary increases and the resulting rise in insurance costs from the tentative budget document saved the district nearly $900,000, but still left the schools with a $3.6-million deficit.

At a specially convened meeting last month, when board members believed the raises built into Gov. Bill Haslam’s budget could be approved, the board approved a 2.5 percent overall raise for the district’s employees.

Two weeks ago, citing poor state sales and business tax collections, Haslam announced he would postpone the plan to give raises to teachers and state workers, hoping the cuts would help close a $160 million gap.

The school district, also affected by lower-than-expected sales tax collections, thought it would likewise not be prudent to provide pay increases when facing such a wide deficit.

School Financial Director Pam Cox said Johnson City also decided to remove employee raises from its budget to help alleviate budget pressures.

Approximately 65 percent of the district’s employees will still get pay increases under the board’s approved step raise plan, the increases of which are included in each year’s budget.

Those step increases amount to $500,000 of the system’s budget deficit.

Expiring state First to the Top Program grants and what the district calls unfunded mandates are a large portion of the $3.6-million hole in the $60 million budget.

The district also plans for more than $1 million for textbook purchases, of which $773,000 is for new math books and $300,000 is earmarked to purchase middle school social studies materials left out of the previous year’s budget.

After using reserve funds to help cover deficits in previous years, the district could be left with $3.1 million in the next budget cycle, more than half of which must remain in reserves as mandated by the state.

In the past two years, Johnson City has increased its funding to the school district by more than 4 percent both years. Transportation, which is governed by the city, has seen about a $125,000 increase over those years, as well.

Cox will present the board-approved budget proposal to the city Wednesday.